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Money Laundering Flashcards

7 cards from real CFE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Money Laundering flashcards as text

  1. Which of the following best describes the 'placement' stage of money laundering?

    Answer: Introducing illegally obtained cash into the financial system

    Placement is the first stage where illegal cash is introduced into the financial system, often through bank deposits or cash-intensive businesses.

  2. A launderer deposits $9,500 in cash multiple times to avoid the $10,000 Currency Transaction Report (CTR) threshold. This activity is known as:

    Answer: Structuring (smurfing)

    Structuring, also called smurfing, is the practice of breaking large amounts of cash into smaller deposits specifically to avoid CTR reporting requirements.

  3. Under the Bank Secrecy Act (BSA), financial institutions in the U.S. must file a Currency Transaction Report (CTR) for cash transactions exceeding:

    Answer: $10,000

    The BSA requires financial institutions to file a CTR for any cash transaction exceeding $10,000 in a single business day.

  4. Which stage of money laundering involves moving funds through a series of accounts, wire transfers, or shell companies to obscure their origin?

    Answer: Layering

    Layering is the second stage designed to distance the funds from their criminal source through complex financial transactions.

  5. A Suspicious Activity Report (SAR) must be filed by U.S. financial institutions within how many calendar days of detecting a suspicious transaction?

    Answer: 30 days

    FinCEN regulations require financial institutions to file a SAR within 30 calendar days of detecting suspicious activity, with a 60-day extension if no suspect is identified.

  6. Which federal agency is primarily responsible for administering the Bank Secrecy Act and overseeing anti-money laundering compliance in the U.S.?

    Answer: The Financial Crimes Enforcement Network (FinCEN)

    FinCEN, a bureau of the U.S. Department of the Treasury, administers the BSA and collects financial intelligence to combat money laundering and terrorist financing.

  7. In the context of money laundering, 'integration' refers to:

    Answer: Reintroducing laundered money into the legitimate economy

    Integration is the final stage where laundered funds are merged back into the legitimate economy, making them appear as lawful income or assets.